Cerradinho Group

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The Brazilian company Cerradinho Acucar e Alcool Ltda (Grupo Cerradinho) was granted authorizations to build three thermal power plants located in the states of Sao Paulo and Goias. The 35-year contracts were signed with the federal regulatory agency ANEEL over the years since February 2001. The cogeneration power plants were set to use sugar cane residues as fuel, as the company main line of business the pressing of sugar-cane and the production of ethanol. The first contract signed was for the Cerradinho Power Plant, which was set to have a capacity of 29 MW. The investment in this plant located in Potirendaba (state of Sao Paulo) was estimated at US$ 9.4 million (BRL 22.2 million) and was financed with a loan from BNDES approved in November 2001 (the debt/equity ratio was 80/20). Construction works on this plant started in 2001, and the unit became operational in 2002. The Cerradinho Cantaduva Power Plant, with a capacity of 75 MW and located in Sao Paulo state, became operational in 2005. The total invested in the power plant was estimated at US$ 25.5 million (BRL 62 million) and was financed with a US$ 19.5 million (BRL 47.3 million) loan granted by BNDES in December 2004. The Porto das Aguas Power Plant, with capacity of 75 MW and located in Goias state (municipality of Chapadao do Ceu), involved an investment of US$ 11 million (BRL 22 million) and was financed with a US$ 11.3 million (BRL 22.7 million) loan granted by BNDES in November 2009 (this loan was directed to the project for the construction of the power plant and the sugar pressing facility).The power plant was under construction as of August 2010. The Potirendaba and Porto das Aguas units were able to arrange power purchase agreements to sell electricity to the national grid by participating in competitive bidding processes managed by federal authorities.